Teo calls for Sepanggar Port to be made region's transhipment hub

KOTA KINABALU: Prime Minister Datuk Seri Najib Razak is in agreement with LDP president Datuk Teo Chee Kang's suggestion to improve the efficiency of Sabah ports to cut down costs in the supply chain.

Speaking at the closing ceremony of LDP 25th Party Congress at Magellan Sutera Harbour here, Najib stressed that the Cabotage policy does not lead to increase in the prices of goods in Sabah.

“Cabotage policy doesn't lead to increase in prices of goods and services. But if the local ships are fixing prices, then they are the culprits. We have to find out,” he said.

Najib also agreed that Sepanggar Port needs to be developed into a transhipment hub serving the region.

Earlier in Teo's speech, he said it is a common knowledge that the cost of living in Sabah is higher than in West Malaysia.

It is common for goods to have tags with two prices, one for West Malaysia, another for East Malaysia. For example, a magazine may be priced RM10.00 in West Malaysia, it could be sold at RM12.00 or RM13.00 in Sabah. For the same model of Proton car, Sabahans have to pay at least RM2,000.00 more than Malaysians residing in the peninsular.

“The Cabotage policy in shipping is often blamed as the main cause i n the disparity of prices between the East and West Malaysia. Sabahans are grateful that a huge allocation in the national budget is given to subsidise the logistic costs to ensure uniformity in the prices across the nation. That, however, cannot be the long term solution.

“It may be justifiable to put the Cabotage policy i n place for protection of the domestic shipping industry, but the people cannot accept the fact that the few shipping lines in Malaysia have formed a cartel that dictates the rate of freight and other related charges.

“The people also cannot accept the fact that domestic shipping have managed to get an exemption under The Competition Act 2010, the purpose of which is to ensure free competition for benefits of the consumers,” said Teo.

He added that the State government has made representation to the Ministry of Transport that a regulatory body under the Ministry should be set up to govern the rate of freight and related charges so that they will not be excessive.

“Admittedly, there are lots of rooms for our ports to improve. I urge for intervention by the Prime Minister so that the efficiency of our ports can be improved to cut down costs in the supply chain.

“Kota Kinabalu is strategically located in the centre of ASEAN countries, with neighbouring Brunei, Indonesia and the Philippines. Kota Kinabalu is also the nearest city in Malaysia to China, Hong Kong, Taiwan, Korea and Japan. As the eastern gateway of Malaysia, the Kota Kinabalu International Airport is connected to cities within the 5 hours flight radius like Tokyo, Seoul, Shanghai, Hangzhou, Shenzhen, Guangzhou, Hong Kong, Taipei, Manila, Singapore, Jakarta, Bali and Perth by a total of more than 150 direct flights per week,” he added.

Being located near to the economic powerhouses in the east, especially China, the Sepanggar Port in Kota Kinabalu has every potential to be developed into a transhipment hub serving this region.

Teo f urther explained that some 30 years ago, the federal government promoted Port Klang into what it is today.

“I believe the same can be done to our Sepanggar Port. The costly and relatively inefficient sea carriage is an impediment to the growth of the manufacturing sector in Sabah.

“If our Sepanggar Port can be upgraded and promoted into the port for this region, it can be a strong enabler to attract more foreign investment to spur more growth in our manufacturing sector and international trade. And, perhaps only then, we can have uniformity in the prices of goods between East and West Malaysia," he said.